Although the company did not state that they are experiencing a “Netflix storm”, they did specify how the investments they have made have moved and the diversity of payments that exist in the app.
Spotify generated about $215 million in podcast revenue last year, according to Dawn Ostroff, the company’s chief commercial officer for content and advertising, having spent $1 billion expanding the vertical, so Ostroff said that while they continue to In investment mode, the expectation of this business is to have a return of 20,000 million dollars in the short term.
To increase its podcast ad revenue, the streaming platform has expanded its ad network, the Spotify Audience Network, and experimented with new mediums such as video podcasts. The company has also gone on an acquisition spree in recent years, acquiring podcast technology companies like Whooshkaa, Megaphone, Anchor, Chartable and Podsights.
“Looking back at the best companies, think of names that everyone is very familiar with, they are very different companies today than when they started. And they may have made their initial mark on a specific category — think books, search, desktop — and then redefined the way we think about those categories by expanding their potential through innovation,” Ek said, emphasizing in how these new verticals of the company continue to promise income.
To date, Spotify has more than 4 million podcasts on its platform.
Can Spotify live the same as Netflix?
The CEO of the company was emphatic about the variety of income they have within the company, because beyond depending on membership payments, they have a monetization model through advertising.
“People who use Spotify on more than one device represent some of our most engaged, lowest churn and highest lifetime value users, and that’s a metric we’ll spend more time on a little later. Today, 89% of Spotify Premium subscribers use Spotify across multiple devices, up from an estimated 75% a few years ago.” In addition to boasting that part of its free version continues to help them earn advertising revenue.
“This dual-money approach, which is now, by the way, inspiring a lot of imitation in streaming, gave listeners the chance to try Spotify risk-free.”
Unlike what has happened with Netflix, the audio company has focused its original efforts on the podcast and audiobook vertical, so it has not had to invest as much money in productions, as the Los-based company has done. cats.
In the last year, there was a growth of 4.8% in the base of consumers who access digital audio platforms and make a periodic payment to them, to reach an accounting of 13.0 million subscriptions, according to figures from The Competitive Intelligence Unit (The CIU).
“Spotify continues to hold first place as a platform for access to digital audio content, accounting for more than four-fifths of total subscriptions (85.8%). This is explained by its abundant offer of content, the possibility of listening to music with advertisements, as well as its entry into the market in its early development stage”, points out the analysis firm. In addition to the fact that not all of his business depends on paid subscriptions, the investment cost of his podcasts still generates a return, according to Ostroff.